Category: Trademark

What happens when a big multinational company discover that it’s trademark name is being used in a fraudulent way by another business? Should legal action be taken in order to protect its brand?

This occurred some months ago, in April 2015, when a very well-known fashion brand sued an Indian Tapas Restaurant for Trademark infringement. The fashion brand in question was the internationally renowned fashion retailer, Zara and the parties involved were Inditex Group, the Spanish company that owns the famous clothing brand ZARA, and the Chennai based restaurant, “Zara Tapas Bar”.

It could look like Inditex was taking advantage of its position as a multinational giant in order to create a monopoly over the Trademark term. However, this couldn’t be further from the truth. A brand name is one of the most important intangible assets that a company owns, and should be protected against any action that may discredit it.

This is also the view of the Delhi High Court who ruled in favour of the clothing brand, ordering the restaurant to change its name. The defendant’s main argument was not successful: they claimed that, considering that both companies functioned in different areas of service, it was unlikely that it would cause any confusion amongst potential clients. And, even if this argument could have been valid in any other scenario, the Court Members concluded that the defendants wanted to benefit from the reputation and goodwill of the plaintiff.

The 2 main factors that the Court took into consideration when siding with the Spanish multinational were:

The nature of use of the mark. The Defendant claimed that they were not using the mark ZARA per se, but “Zara Tapas Bar”. However, as its website and pages of social networking showed, it was mostly promoting the brand with emphasis on Zara rather the entire mark Zara Tapas Bar. Moreover, the Defendant associated itself with Spanish products (Tapas), where the plaintiff’s brand originates from. Clearly, leveraging the brand equity built up by Zara (the fashion brand) was demonstrated.

The mark becoming Publici Juris (of public right). The Defendants argued that the mark had became common property and even provided a list of marks containing the name Zara. However, the Court stated that it is the choice of the plaintiff to take legal actions against infringers if they perceive it necessary.

So Trademark infringements can be found between companies operating in different industries, even if, as we have seen, neither them nor their goods and/or services, present any similarities at all. To avoid confusion and future problems it is always recommended to count on a good domain management strategy from the very beginning.

In conclusion, what does this mean for brand owners? Monitoring keywords pertaining to your brand is essential in today’s digital age. Investing a little will save a lot in the long run. Proactively enforcing a brand protection strategy is crucial when protecting your brand and digital assets.

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